Is user experience the future of Digital Banking?

Digital banking has evolved rapidly from ATMs in the 1960s to mobile apps that put entire banks in our pockets. But while the technology has advanced, many banks still struggle with the basics of offering a digital user experience. Poor authentication rates, clunky interfaces and services that exclude disabled customers suggest that the industry still has a long way to go. So is user experience really the future of Digital Banking, or simply the latest buzzword that will fade away?

This question was at the heart of a conversation on G+D Netcetera’s Future Proof podcast, where our CEO Carsten Wengel interviewed Martin Meier, Head of Strategy in Digital Banking at G+D Netcetera. Martin brought a unique perspective to this discussion, having spent 18 years digitising the Swiss banking sector, worked with over 100 banks and helped develop mobile banking apps used by millions of people every day.

Their conversation reveals why customer experience isn’t just important for banking's future, but why it might be one of the biggest things that matters.

The answer to this question cuts straight to the heart of modern banking strategy. Many banks find themselves caught in the middle, offering digital services that aren’t quite good enough to compete with the tech giants but too mediocre to deliver real value to customers.

But what about banks that try to muddle through with mediocre digital experiences? Martin’s clear about the risks, and they go far beyond just customer satisfaction scores.

“I would really avoid building a bad user experience,” he warns. “That’s because it goes back to your brand and how your brand is perceived in the market.”

The choice is even more obvious when you consider that banks aren't just competing with each other anymore. The competitive landscape has fundamentally shifted, and traditional banks now find themselves up against companies with vastly different resources and priorities.

“You have to compete with big techs and also neobanks - online banks that really push client interfaces a lot,” he notes.

And the stakes keep rising. Today’s banks need to deliver experiences that work for everyone, including people with disabilities. Martin says his team runs specific tests with disabled users during development to make sure their banking apps work for customers who may be deaf or blind. As well as being compliant, it’s an important part of ensuring financial inclusion.

The uncomfortable reality for traditional banks is that the next generation of customers is growing up in a world where banking apps compete for attention with TikTok, Instagram and YouTube. And increasingly, these platforms are where young people go for financial advice.

Martin’s insights into this challenge come from a particularly relevant source - his two Gen Z daughters. And what he’s observed should worry every traditional bank.

But perhaps the bigger challenge is that this generation isn't getting their financial advice from banks at all.

“What we also recently discussed is how this generation receives financial advice,” Martin reveals. “And we saw - which also a lot of studies report - that especially the younger generation receives a lot of information, not from the banks, but from social media like TikTok and YouTube channels.”

Carsten draws a perfect analogy to illustrate this shift, showing how each generation has fundamentally changed how they discover and consume information.

“The example I’d like to give is that when you and I planned travel in the old days, we bought this old-fashioned paper book you can read about the country you want to go to,” he recalls. “And then the next generation was using TripAdvisor where all the information was available digitally. But the next generation have their social media, so they look it up on TikTok and YouTube, and they follow what influencers suggest.”

This change in information consumption creates both a challenge and an opportunity for banks. The challenge is competing with entertaining, engaging content creators. But the opportunity..?

Martin highlights a potential area for banks to address: "NextGen Customers and financial literacy," he states, suggesting an opportunity for financial institutions.

So how could banks bridge this gap? The answer might lie in borrowing techniques from the very platforms that are capturing their customers’ attention.

“One interesting topic is gamification,” Carsten suggests. “We can make the banking experience much more fun and entertaining.”

Martin shares an example that shows just how effective this approach can be when executed well.

“A Ukrainian bank Monobank is using a cat, and the cat is following you through all your financial life,” he explains. “So it guides you through the onboarding process. And if you see a physical advertisement for that bank, you can scan it, and then the cat runs you through the onboarding process. You can even gain points while you proceed in the process.”

The bank’s gamification strategy seems to have proved effective. Within two years, the bank achieved a 35% market share in Ukraine and maintained a 4.9 App Store rating.

“If you compare it with other financial applications, that’s really impressive,” Martin notes. “They managed to connect value for the customer and value for the bank.”

So it seems that banks that want to engage digital natives need to make financial services as entertaining and rewarding as the social media content their customers consume.

The holy grail of Digital Banking might be creating the kind of seamless, personalised experience that customers get from Amazon - where the service seems to anticipate their needs and offer exactly what they want, when they want it. But unlike e-commerce, banking deals with the most sensitive personal data imaginable, making the privacy stakes much higher..

“It would be a huge mistake if you don’t leverage your data,” says Martin. “You have to do that, otherwise someone else will use the data and make financial offerings on your behalf.”

But leveraging data doesn't mean compromising privacy. Martin envisions sophisticated personalisation using innovative approaches that respect customer boundaries and deliver genuine value.

“We recently ran a couple of discussions in the financial advisory area, and we were talking about digital twins,” Martin recalls. “This involves looking at your financial situation and what’s important in your financial life. If we can figure that out, we find your digital twin. And it’s valuable to know how someone makes decisions and what might help him in their financial life.”

The digital twin concept is particularly interesting because it allows for personalisation without requiring banks to store or analyse overly granular personal details. So instead of tracking each individual transaction, the system could identify patterns and match customers with similar financial profiles who’ve faced comparable decisions.

“I was thinking recently about combining financial advisory data with transactional data,” Martin explains, “and bringing that data together to provide customers with even more personalised financial offerings.”

This combination could be powerful - transactional data shows what customers actually do with their money, while advisory data reveals what they say they want to achieve. Bringing these together could help banks offer valuable and relevant guidance rather than generic financial products.

But Carsten voices the concern that many customers (and regulators) would share about this level of data integration.

“That sounds really interesting,” he says. “But on the other hand, it makes me worried. Because you talk about my personal data, past life, future life… and the bank has everything. So how do you make sure that it’s handled by the right people and doesn’t get into the wrong hands?”

Martin then outlines a three-pillar approach to data security that addresses different aspects of the privacy challenge:

This approach promises to deliver Amazon-like personalisation while, at the same time, maintaining customer trust and regulatory compliance. The key insight is that privacy and personalisation don’t have to be opposing forces - when customers have control over their data, they’re often more willing to share it in exchange for valuable services.

Martin’s vision for banking suggests that user experience isn’t just important for the future, but it might be the only thing that differentiates successful banks from those that become irrelevant.

“Digital Banking will be even more digital, even more available, even more instant. It will be much more personal,” Martin predicts. “We already have digital AI assistants that can help you in your financial life.”

But achieving this future will require banks to make strategic decisions today about where to focus their resources and how to compete in an increasingly crowded market.

The conversation with Martin highlights three crucial questions that every bank needs to answer:

• Is it worth investing in designing outstanding user experiences or to focus elsewhere?
• How will they find ways to make banking as engaging as social media platforms that capture their customers’ attention?
• How can they leverage their customer data while maintaining the security and trust that customers expect?

“At G+D Netcetera, we build human-centric systems,” he says. “So putting the human at the center of what I do, what I care about, that’s my focus point."

It seems that in Digital Banking, user experience has evolved from a nice-to-have feature into the primary competitive advantage.

Want to learn how G+D Netcetera can help your bank create outstanding user experiences that engage the digital generation and leverage customer data responsibly? Get in touch with our experts.